Govt injects US$11m into IDBZ

Zimbabwe as fresh capital to support infrastructure and other development pro- jects.
As the majority shareholder in IDBZ, the Government has been at the forefront of pushing for viable projects to improve and enhance infrastructural development projects countrywide. This has ranged from the rehabilitation of the road network, housing, dam construction and upgrading airports.

In an interview, IDBZ chief executive Mr Charles Chikaura said in addition to the US$11,2 million brought in as fresh equity, the bank made a net profit of US$3,9 million last year to augment its capital.
“In line with the bank’s business model, the main source of funding is debt through lines of credit,” he said. “As at June 2011, the bank had mobilised a total of US$150 million in lines of credit, of which US$41,2 million was from offshore sources.

“The bank hopes to progressively increase external lines of credit to US$100 million by December 2011, while maintaining the domestic lines.”
Mr Chikaura said that had it not been for the existence of sanctions, the bank could have mobilised even more funds from external sources through lines of credit.

But IDBZ has adopted off-balance-sheet project-based lending in partnership with regional development finance institutions as a mitigatory strategy. To this end, Mr Chikaura said, a total of US$50 million will be made available to support infrastructure and other developmental projects in the current year.

The IDBZ was launched by the Government as a vehicle for the mobilisation of infrastructure development with finance from both domestic and international sources. The bank’s mandate is to mobilise financial and technical resources of appropriate duration and cost for public and private institutions involved in infrastructure development and to facilitate investment in infrastructure.

On the role of the IDBZ in the construction of the Tokwe Mukorsi Dam in Masvingo, Mr Chikaura said the bank was managing project funds under an agency agreement with the Ministry of Finance.
Major construction work stopped on the dam temporarily in 1999 due to limited funds, but maintenance work continued with the ultimate objective of preserving the value of the huge investment made by Government in the project.

Work resumed this year when the Government allocated US$30 million for the project. This amount has since been disbursed to the contractor. It is expected that the Government will make further allocations to the project to maintain the momentum.
Secretary for Finance Mr Willard Manungo recently said the country requires about US$15 billion to rehabilitate infrastructure as an enabler of economic development.

He said there was need to address infrastructure deficits to allow economic development as infrastructure had been identified as one of Zimbabwe’s major drawbacks in economic development.